On January 1, 2015, Lantau Corp. issued $600,000 of 20 year, 11% bonds for $554,860, yielding...

On January 1, 2015, Lantau Corp. issued $600,000 of 20 year, 11% bonds for $554,860, yielding a market (yield) rate of 12%. Interest is payable semiannually on June 30 and December 31 a) Confirm the bond issue price

b) Prepare journal entries to record the bond issuance, semiannual interest payment and discount amortization on June 30, 2015, and semi-annual interest payment and discount amortization on December 31, 2015. Use the effective interest rate.

c) Lantau elected to report the bonds in its financial statements at fair value. On December 31, 2015, these bonds were listed in the bond market at a price of 101 (or 101% of par value). What entry is required to adjust the reported value of these bonds to fair value?

d) Prepare a table summarizing the effect of these bonds on earnings for 2015, including interest expense and any unrealized gain or loss resulting from the fair value adjustment in requirement c

Expert Solution

ekkarill92 answered 2 years ago

On January 1, 2016, Trueman Corp. issued $600,000 of 20-year, 11% bonds for $554,860, Yielding a...

On January 1, 2016, Trueman Corp. issued $600,000 of 20-year, 11% bonds for $554,860, Yielding a market ( yield) rate of 12%. Interest is payable semiannually on June 30 and December 31. a) Confirm the bond issue price. b) Prepare journal entries to record the bond issuance, semiannual interest payment and discount amortization on June 30, 2016, and semiannual interest payment and discount amortization on December 31, 2016. Use the effective interest rate method. c) Post the Journal entries from...

1. On January 1, 201X, Acorn Corporation issued $600,000 of 10%, 20-year bonds for $509,580, yielding...

1. On January 1, 201X, Acorn Corporation issued $600,000 of 10%, 20-year bonds for $509,580, yielding a market rate of 12%. Interest is paid on July 1 and December 31. Acorn uses the interest method to amortize the discount. Tasks: a. Prepare an amortization schedule for the first three semiannual periods. b. Prepare journal entries to record the following: Bond issue on January 1. Semiannual interest payments on July 1 and December 31 as well as amortization of discount. c....

On January 1, 2015 $20,000,000 of 20 year bonds were issued with a coupon rate of...

On January 1, 2015 $20,000,000 of 20 year bonds were issued with a coupon rate of 6.5% when the market rate was 6%. Interest is paid every six months on June 30th and December 31st. Prepare the following journal entries and show your calculations as to how you arrived at the numbers. 1)Issuance of bonds on January 1, 2015 2) Payment of interest on June 30th and December 31st of both 2015 and 2016. 3) What is the carrying value...

On January 1, 2015, Hacker Inc. issued (sold) $600,000 of 8%, six-year, convertible bonds for gross...

On January 1, 2015, Hacker Inc. issued (sold) $600,000 of 8%, six-year, convertible bonds for gross proceeds of $660,000. Each $1,000 bond was convertible into 20 common shares. Similar non-convertible bonds were yielding 9% at that time. Interest was paid semi-annually, on June 30 and December 31. On July 1, 2019, all bondholders exercised the conversion option and converted the bonds to common shares. The interest payment had been made on June 30, 2019, as normal. The company prepares its...

Bonds Payable: On January 1, 2014 – ABC issued $800,000.00 of 20-year, 11% bonds for $739,814.81,...

Bonds Payable: On January 1, 2014 – ABC issued $800,000.00 of 20-year, 11% bonds for $739,814.81, yielding a market (yield) rate of 12%. Interest is payable semiannually on June 30th and December 31. a. Confirm the bond issue price. b. Indicate the financial statement effects using the template for (1) bond issuance (2) semiannual interest payable and discount amortization on June 30, 2014 (3) semiannual interest payment and discount amortization on December 31, 2014.

Harrison Company issued $600,000 of 10%, 20-year bonds on January 1, 2020. Interest is paid semiannually...

Harrison Company issued $600,000 of 10%, 20-year bonds on January 1, 2020. Interest is paid semiannually on July 1 and December 31 each year. Harrison Company uses the straight-line method of amortization for bond premium or discount. B. Assume the bonds are issued at 100. Provide the journal entries for the issuance of the bonds and the first two interest payments. (3 points)

2. Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2020, at 103. Interest is...

2. Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2020, at 103. Interest is payable semiannually on July 1 and January 1. The effective interest rate is 8%. Capital uses the straight-line method of amortization and has a calendar year end. Instructions: Prepare all journal entries made in 2020 related to the bond issue.

On January 31, 2021, B Corp. issued $600,000 face value, 12% bonds for $600,000 cash. The...

On January 31, 2021, B Corp. issued $600,000 face value, 12% bonds for $600,000 cash. The bonds are dated December 31, 2020, and mature on December 31, 2030. Interest will be paid semiannually on June 30 and December 31. What amount of cash received should B report at january 31, 2021

On May 1 of the current year, Cassandra Corp. issued $600,000 of 4% bonds payable at...

On May 1 of the current year, Cassandra Corp. issued $600,000 of 4% bonds payable at par with interest payment dates of April 1 and October 1. In its income statement for the current year ended December 31, what amount of interest expense should Cassandra report? $10,000 $4,000 $14,000 $16,000

1) K Company issued $672,000 of 11%, 20-year bonds on January 1, 2017, at 102. Interest is...

1) K Company issued $672,000 of 11%, 20-year bonds on January 1, 2017, at 102. Interest is payable semiannually on July 1 and January 1. K Company uses the straight-line method of amortization for bond premium or discount. Prepare journal entries for the following: a) The issuance of the bonds. b) The payment of interest and the related amortization on July 1,2017. c) The accrual of interest and the related amortization on December 31, 2017. 2) Coronado Co. sold $1,930,000 of...

Question